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membership cards to residents annually which will require payment of a $10 processing fee which fee may be increased from time to time based on increases in the cost of living. Up to and including April 1, 1998, Lessee shall issue resident cards to bona fide residents at no charge to such residents and may deduct the actual cost thereof (but not to exceed ten ($10) dollars per card) from its rental obligations to Lessor. For purposes of this Section 3.3, the term "off peak" shall mean Monday, Tuesday, Wednesday and Thursday except federal holidays. On Friday, Saturday, Sunday and federal holidays (peak times) before 7:30 a.m. and after 12:30 p.m., adjusted seasonally and for daylight savings time, residents shall pay green fees no greater than 75% of the posted non-resident rate. Without a reserved tee time and on a space available basis, residents shall pay green fees no greater than 75% of the posted non-resident rate during peak times and between 7:30 a.m. and 12:30 p.m., adjusted seasonally. The method of seasonal adjustment shall be fixed and determined by Lessor and Lessee each acting reasonably. Notwithstanding anything herein contrary, Lessee shall not change or modify the green fees in effect on the Commencement Date until the completion of renovation of the Tony Lema Course and commencement of Phase III of this Lease. 3.3 (b) Except during times when the Renovation (described in Article 13) is in progress or other capital improvements are under construction and subject to weather conditions and the limitations imposed by tournaments, the Facility will be open to the public for golf course play on a non-discriminatory basis from dawn until dusk every day of the year. 3.3(c) Lessee will interview all those persons who at the Commencement Date (defined below) are current full and part time golf course maintenance employees and will consider them for employment subject to Lessee's customary hiring practices and employment criteria. Lessee shall not be obligated to make an offer of employment and this Section shall not be so construed. 3.3 (d) Lessee will keep the nine -hole Marina Golf Course open during the renovation of the Tony Lema Course and the Tony Lema Course open during renovation of the Marina Golf Course. 3.3 (e) Lessee shall consider in good faith the use of reclaimed water for irrigation purposes. LEASE AGREEMENT BETWEEN CITY OF SAN LEANDRO AND AMERICAN GOLF PAGE 5 11/13/97 FINALJ.\WPD\CSL\136\OIWGREE\GOLFCOUR\AGREE\LF.ASE.CLN